Dear 18-year Old Self,
Congratulations! You’ve graduated high school and have some great plans for college (but heads up, you’ll discover your first year in that you want to ditch the private school and head to a larger public university instead. Don’t be afraid to speak up when you realize this; life is too short and college is too expensive to be unhappy.) This is an amazing time in your life because you are really free from a lot of obligations and responsibilities and there are many choices ahead of you. It’s about those choices I want to talk to you today.
In case you’re wondering, this is the 34-year old version of yourself. I want to let you know that 34 is looking pretty good – you’ll be happily married with two adorable kids and a job that allows you to stay at home. However, unless things change now, you’re likely to make a few money mistakes along the way that will cause you some disappointment and heartbreak. Here’s what I would like you to know now….
1. Be wary of credit cards. It will seem innocent enough, just put one expense you can’t quite afford now (but will definitely pay off next month!) on a $0.00 balance card. If you are not cautious, you’ll find ways of justifying more and more “needed” purchases until you’ll receive your statement in the mail next month and wonder what happened. Take note, this is a dangerous game and one you can’t win.
2. Don’t make big money decisions when your emotions are running high. There are going to be times in your adult life when you will be afraid, and feel like the only way out is with making a purchase. Question real estate agents and mortgage brokers who tell you “you must buy a house NOW” or the auto repair mechanic who insists you need to spend a hefty sum of money to fix your car now. These people have a paycheck to earn and might not have your best interests in mind. When you are in these moments, take a breath and think objectively first. There are almost always other options.
3. Never make big money decisions without being in agreement with your spouse. The man you’re going to marry one day – he’s pretty stinkin’ awesome. (And he’ll be handsome, to boot!) Remember that the two of you will become one, and that means learning to work out your finances together. This won’t always be easy, but it’s part of the deal of getting married.
4. Start good money habits – now! Don’t wait until you have a house, or kids, or a full-time job. Good money habits start now. Pay attention to your bank account, keep your checkbook ledger up to date, pay bills on time, and use cash wherever possible. Like eating healthy, it’s really about making good choices repeatedly over time – even on the small stuff.
5. Save money. Unless things change, you’ll likely find yourself at 34 wishing you’d done a better job of saving money – even small amounts – over a long period of time. Find a way to pay yourself first, even if it means setting up an automatic transfer from your checking to savings. Having a good savings account will free you from the reliance of debt…. and refer to my #1 above.
6. Sometimes, money will be scarce. But things do change. I’m not going to lie… there will be times in your adult life you’ll wonder how you’re going to make it. You will have times where you will cry at night, wondering how you’re going to pay the bills or change your situation. There will even be a humbling point early in your marriage where you’ll live in a relative’s attic (watch your head…the ceiling slopes!). I want to let you know now, it will be OK. God will provide. Things will happen that will astonish you and you’ll look back wondering how you were so blessed. When you have these mountaintop moments, don’t take them for granted. Be wise with the money you receive and don’t forget where you came from.
7. Don’t think twice about being generous. There will be clear moments when God will put someone in your path with a need. Don’t think twice about helping them, just do it. Trust me, you won’t regret it. Just so you know… you will also encounter many people who will be generous with you when you need it most.
8. Learn to live simply. It will be easy to covet people who have nicer “stuff” than you. But as you get older, you’ll realize you want less stuff and more peace of mind. Learn to live beneath your means. Question purchases made on impulse (or worse yet, credit). Use cash wherever possible and when you hear about a guy named Dave Ramsey, listen to his advice; it’s good stuff. Oh, and learn to clip coupons. They’re really awesome.
Time has a way of moving fast. You will be surprised how quickly 34 comes. For your peace of mind, make good money choices – starting now. It’s true what they say, money is not everything, but I encourage you to do the best with whatever money you receive.
One last thing – that English degree you’re thinking of getting? Go for it. I think you’ll find it serves you well.
Your 34-Year Old Self
Question: what advice would you give to a younger version of yourself about money?